South Africa’s President Ramaphosa Signs Landmark Electricity Regulation Amendment Act

President Cyril Ramaphosa has officially signed the Electricity Regulation Amendment Act into law, introducing sweeping reforms to South Africa’s electricity sector. The Act, which amends the Electricity Regulation Act of 2006, aims to establish a competitive electricity market, lower energy costs, and boost investment in new generation capacity to ensure energy security.

Key provisions of the Act include the creation of an independent Transmission System Operator (TSO), which will be the custodian of the national grid. The National Transmission Company of South Africa will serve as the interim TSO until a permanent entity is established within five years. The Act also facilitates the development of a competitive market platform for the wholesale and retail buying and selling of electricity.

The Act empowers the National Energy Regulator of South Africa (NERSA) to license market operations and mandates the creation of a Market Code to govern the competitive market. It also establishes guidelines for setting tariffs, ensuring that NERSA allows licensees to recover full costs and earn reasonable returns, while promoting efficiency and considering factors like security and diversity of supply, as well as renewable energy.

To promote fair competition, the Act prohibits the system operator from discriminating against different electricity generators or customers, ensuring equal access to the transmission and distribution network.

In addition to market reforms, the Act introduces stringent penalties to protect public infrastructure. Offenders who damage or steal transmission and distribution infrastructure face fines of up to R1 million or five years in prison, while those unlawfully receiving such materials could face fines of up to R5 million or 10 years in prison.

These reforms, aligned with the Energy Action Plan and the Eskom Roadmap, are expected to modernize South Africa’s electricity system, end load shedding, and encourage the growth of renewable energy, ultimately leading to lower energy prices and increased industrial activity.